Developer wins appeal against NAMA
The seven-judge court yesterday unanimously allowed the appeal after finding NAMA had never at any stage made any legally valid decision to acquire the loans.
As a result of the judgment, it appears, if NAMA still wants to acquire the McKillen loans, it will have to make a formal decision to that effect and start the process again.
The court stressed yesterday it was of “critical importance” in this case that NAMA had never reached the stage of serving on the relevant banks a loans acquisition schedule under the NAMA Act 2009.
Serving a schedule would mean actual acquisition of the loans by NAMA and the issue whether NAMA had made a decision to acquire them would then have had to be considered “from a different perspective”, it said.
This case was “focussed entirely” on the particular circumstances of the McKillen applicants and their loans, the Chief Justice, Mr Justice John Murray said.
Given its finding no valid decision was made to acquire the loans, the court did not make findings on three other issues raised but it did reject a fourth claim the proposed loans acquisition breached the European Commission decision approving the NAMA scheme.
The court will next Wednesday consider arguments whether the three other issues, including the constitutionality of provisions of the act and whether a right to fair procedures applies, should be determined.
Those issues could be considered contingent on whether NAMA had taken a valid decision and there was an issue about their justiciability, the court said.
Mr McKillen and 15 of his companies had appealed against a three-judge High Court decision last November refusing to halt the loans acquisition.
The case relates to the McKillen loans with Bank of Ireland but has implications for their €2.1bn loans with the participating institutions in NAMA.
NAMA had argued the extent of that exposure represented a “systemic risk” to the relevant institutions but Mr McKillen denied any such risk and argued his loans were performing.
Yesterday, the Chief Justice ruled the purported “interim” decision to acquire the loans made on December 11 and 14, 2009, by a team doing preparatory work for NAMA before NAMA was formally established on December 21 2009 was invalid and of no legal effect.
Contrary to what the High Court had decided, that interim decision was not given legal effect by any subsequent act or series of acts by NAMA, he also ruled.
“This is no mere matter of form. It is fundamental to the functioning of a statutory body that it, itself, take such decisions as it is empowered to make by the statute and exercise any discretions conferred on it. Consequently, NAMA has made no decision to acquire the appellants loans.”
There were no grounds upon which the court considered it should exercise its discretion to refuse relief to the McKillen applicants, he added.
NAMA had argued the word “disagree” written by an interim management team on a spreadsheet at meetings on December 11 and 14, 2009, prior to the formal establishment of NAMA represented a decision to acquire the loans.
PADDY McKILLEN owns a large stake in the five-star Claridge’s Hotel in London and Tuesday’s landmark case against NAMA could affect its sale.
He owns 37% of Claridge’s parent company, the Maybourne Group, which also owns the Berkeley and Connaught hotels in London. The judgment could have an impact on the battle for control of the Maybourne group.
Both the Chinese government and Qatar Holding, part of Qatar’s national investment fund, which bought Harrods in May, are reportedly interested in acquiring the 35% of the group owned by another Irish investor, Derek Quinlan.
Quinlan is already in talks with David and Frederick Barclay, the owners of the Telegraph newspapers and the Ritz Hotel, who are also battling for control of the group after they acquired a 24.87% stake two weeks ago. The deal valued the group at more than stg£900m.
CONNECT WITH US TODAY
Be the first to know the latest news and updates
